UABIO proposals to the draft law № 3658 on improving the conditions for supporting the production of electricity from alternative energy sources. Letter 488
The UABIO team analyzed draft law № 3658 and also formed own vision of improving the document.
It will be recalled that on June 15, 2020, a draft Law № 3658 on amendments to some laws of Ukraine to improve the conditions for supporting the production of electricity from alternative energy sources was registered by the Verkhovna Rada of Ukraine.
Full text of the draft law № 3658, June 15, 2020
The Bioenergy Association of Ukraine generally supports the draft law, in particular, the provisions:
- reducing the minimum share of mandatory allocation of annual support quotas for individual technologies from 15 to 10 percent;
- providing for the possibility of conducting auctions for individual alternative energy sources, as well as for other types of alternative energy sources, except for solar and wind.
The document contains provisions that may adversely affect the development of bioenergy and other alternative energy sources facilities, in particular:
- The draft law proposes to determine the size of the maximum price offer of auction participants at the level of 12 Eurocents per 1 kWh. For bioenergy projects, adopting this provision will reduce the possible upper limit of auction bid by 3% (from 12.39 to 12.00 Eurocents per 1 kWh).
- The draft law proposes to hold auctions in accordance with the auction schedule but does not specify the time limits for their holding. Potentially a schedule may not provide for auctions at all, or they will conduct extremely rare.
- The draft law proposes to determine the share of the annual quota of support that can be received by one final beneficial owner for one calendar year, in the amount of 35 percent instead of 25 percent. However, such changes will lead to market concentration in the hands of “big” players.
- The draft law proposes to establish a forecasting error by December 31, 2029. For facilities that generate electricity from the wind it will make up to 10% and for facilities that generate electricity from the solar — up to 5%. At the same time, there are no permissible deviations for facilities that produce electricity from biomass. However, the production of electricity from biomass does not make it possible to ensure stable electricity production without any deviations.
Що UABIO пропонує врахувати у What does UABIO propose to take into account?
- Do not reduce the upper limit of the price offer for facilities that produce electricity from biomass and biogas.
- Establish time limits for conducting auctions in accordance with the auction schedule for the respective year, but not less than twice a year, not later than April 1 and October 1 of the respective year.
- Approve the share of the annual support quota that can be received by one final beneficial owner for one calendar year at the level up to 25 percent.
- Set up permissible deviations for facilities that produce electricity from biomass
- Develop a mechanism for working during peak loads, in particular through the usage of energy storage, and also provide the opportunity to use the current size of the “green” tariff for those businesses that use these devices.
- Include in legislation certain provisions of the Memorandum. Namely, Paragraph 3 of the Memorandum stipulates that the state bodies of Ukraine will ensure full and timely current payment by the Guaranteed Buyer to RES producers for supplied electricity.
- Supplement the final and transitional provisions of the draft law with a provision on payments for electricity produced from biomass and biogas in the amount of at least 60 percent of the amount payable in the relevant settlement period (month), including payments of debts incurred in previous periods.
In 2019, 89% of “green” tariff payments were received by solar and wind power plants. Biomass and biogas plants were received only 7% of payments. The cost of raw materials in the bioenergy sector is about 60%, so the debts of the Guaranteed Buyer threaten to shutdown them.
UABIO
A letter from UABIO members to the Prime Minister of Ukraine Denys Shmygal, the Chairman of Verkhovna Rada Committee on Energy and Housing Andriy Gerus, the Chairman of Verkhovna Rada Committee on Environmental Policy and Nature Management Oleh Bondarenko, the Acting Minister of Energy and Environmental Protection of Ukraine Olha Buslavets, and also the Minister of Environmental Protection and Natural Resources of Ukraine Roman Abramovsky.
Position of the UABIO is prepared, discussed and agreed upon by the members of the UABIO, which produce more than 50% of all energy from biomass and biogas in Ukraine.
