UNIAN
Despite the National Commission for state regulation of energy and public utilities decreasing the “green tarrif” by 55% for solar energy and by 50% for other renewables, "green energy" remains too expensive for Ukraine, according to member of the National Commission for state regulation of energy and public utilities Andriy Gerus, German news broadcaster Deutsche Welle reports.
"In 2014, payment of tariffs for ‘green energy’ amounted to UAH 6.4 billion. This year, the amount will almost double to UAH 12 billion,” Gerus said.
“This is not the result of an increase in production capacities but due to devaluation of the hryvnia, as green tariffs are pegged to the euro and paid in euros.”
Although "green energy" companies in Ukraine generate little more than 1% of the country’s total electricity, payments of "green tariffs" account for about 10% of the total amount of funds that state enterprise Energorynok pays to electricity producers.
The high cost of "green energy" in Ukraine is attributed to high "green tariffs" adopted by the national regulator in 2009 -2010, in accordance with the law that, some critics argue, was worked out actually for the needs of specific people close to former President Viktor Yanukovych. The highest tariff in almost 47 cents per kilowatt-hour was set for solar power plants, nearly 97% of which at that time were controlled by the Activ Solar company. Some experts and market participants associated this company with the Kluyevs - the former head of the Presidential Administration Andriy Kluyev and his brother, MP Serhiy Kluyev.
Producers of electricity from alternative sources in Ukraine have received a lot of benefits - they are exempt from income tax until 2020, and the import of specialized equipment and materials is not subject to taxation by VAT. Also, according to the law "On land for energy facilities and legal regime of special zones of energy objects", the land rent for such producers has been reduced by 70%. While some of these benefits were canceled last year, the main preference has remained – the state is obliged to purchase all of the electricity generated by the producers of alternative energy at the established tariffs.
To create competitive conditions in this market, the National Commission launched an initiative to amend the current law. It is suggested to introduce a premium of 10 percent to the "green tariff" for those who buy Ukrainian equipment for their "green energy" businesses. It is also suggested to reduce tariffs for solar power to 17 cents per kilowatt hour, and for wind power to 10 euro cents. The commission intends to retain for 15 years the pegging of tariffs to the euro, explaining this by the fact that alternative energy companies have borrowed funds in euros from international financial institutions, in particular the EBRD, and should be able to service their debts.
The specialized energy association of Ukraine insists that the changes to be entered to the law envisage that the tariff is determined by open competition, and the winning the company will be the one that offers the lowest tariff. Currently, the tariffs are set by the National Commission itself. However, green energy producers are against such an innovation.
"If there are tenders - we will again return to corruption: the market will be divided – DTEK has the largest wind power plant and the Kluyevs [the largest] solar power plant. Everything will be like in the past" the director of Sivashenergoprom Andriy Nemchenko said.
Investors have high hopes for the promised amendments to the law on "green tariffs." They hope the preferential rates will be much easier to obtain.
"Foreign investors always compare international conditions and the "green tariffs" there with those effective in Ukraine. Until now, solar power plants have been provided with significant preferences that are not available anywhere else in the world. It is necessary to take into account the global trends and ensure producers equal conditions", said the country director of EuroCape New Energy Peter O'Brien. He noted that for the first time in recent years, investors and producers have been also involved in the working group for the preparation of legislative changes.
The National Commission for state regulation of energy and public utilities hopes that the Verkhovna Rada in May will adopt legislative changes, and from July green energy producers will operate under new rules. After that, the regulator says, "green energy" in Ukraine will be available to all, and not just to the elite.