The hybrid war against the RES sector continues.

The Global 100% RE Ukraine team, of which the Bioenergy Association of Ukraine is a member, appeals to the President of Ukraine Volodymyr Zelenskyi to respond to the danger.

  • Download the full text of the Global 100% RE Ukraine letter to the President of Ukraine Volodymyr Zelenskyi regarding the extremely high risks in the undeclared hybrid war that has been waged over the last few years against the RES sector in Ukraine and the lack of adequate state response to this situation (in Ukrainian).

Why is this a war?

1. The process of introducing the excise tax on the sale of electricity from renewable energy sources (RES) at the level of 3.2%.

  • The introduction of an excise tax on electricity from RES will indicate disregard for both the current legislation and the obligations to investors in RES made by the current Government and the current Verkhovna Rada of Ukraine.
  • Such an initiative will further damage the investment climate in Ukraine and make it impossible to raise funds for new energy and environmental projects.

2. Retrospective reduction of the “green” tariff for producers from renewable energy sources, non-payment of its obligations by SE “Guaranteed Buyer”.

  • The European Bank for Reconstruction and Development (EBRD) and the international financial organization NEFCO have officially refused to invest in new “green” energy projects in Ukraine. The same position was taken by some national banks, namely: Oschadbank, Ukrgasbank, Privatbank and Ukreximbank.

3. Ukraine’s Second Nationally Determined Contribution to the Paris Agreement (НВВ2) has not yet been approved.

The updated НВВ2 discusses the next, more ambitious goal of reducing CO2 – 35-40% by 2030. And in 2060, Ukraine must become climate-neutral, so achieving this goal will be impossible without the large-scale development of renewable energy sources.

4. The Ministry of Justice of Ukraine has already received notification of the first arbitration against the state of Ukraine regarding the violation of the Energy Charter Treaty (1994).

Due to non-fulfillment by the state of its obligations to ensure timely and full payments to producers of renewable energy at the “green” tariff for electricity supplied to the grid in 2020. Moreover, SE “Guaranteed Buyer” continues to accumulate debt to producers with RES already in 2021.

Currently, debts to producers for electricity supplied from RES will amount to more than UAH 20 billion.

Global 100% RE Ukraine

5. The Constitutional Court of Ukraine has not yet ruled on the constitutional petition of 47 people’s deputies to declare unconstitutional certain provisions of the Laws of Ukraine on the establishment of a green tariff. The submission of the civil platform “Antitrust League” to the Antimonopoly Committee of Ukraine on the illegality of state support of the RES sector has a significant impact on the development of the green energy sector.

The lack of solutions in these legal cases creates uncertainty in the Ukrainian RES market. It is a barrier to further attracting investment in this sector.

6. Auctions with RES have not been launched.

It will be recalled that the first auction was to take place at the end of 2019, ie the resolution of this issue has been delayed for 2 years.

What to prepare for in such conditions?

  • Full stop investing in the renewable energy sector.
  • Degradation of the energy system.
  • The state’s inability to provide reasonable prices for heat and electricity for consumers.
  • Stop the process of Ukraine’s integration into the EU.
  • Significant losses of Ukrainian export-oriented business after the introduction CBAM (Carbon Border Adjustment Mechanism) in European countries.
  • Significant losses from the state budget of Ukraine to cover the costs caused by international arbitrations.

What is the solution?

  • Adopt a Strategy for the Development of Renewable Energy Sources until 2050, including the development of green hydrogen technology.
  • Establish a decarbonisation fund and gradually increase the CO2 tax according to European norms and practices.
  • Introduce green auctions for the construction of new RES projects, shunting facilities and energy storages.
  • Stop political pressure on RES investors and ensure a stable investment climate in the country.

The position of the Global 100% RE Ukraine is prepared, discussed, and agreed upon by the members