Law 575/97-BP on Electricity, amended by Law 601-VI and Law 5485-VI on Green Tariff (Feed-in Tariff)
This Law determines the legal, economic and organizational principles on electricity, and regulates the relations, related to production, transmission, supply and use of energy, providing of power safety of Ukraine, competition and defence of rights for users and workers of industry.
The amendment by Law 601-VI defined green tariff as the special rate to purchase electricity produced by through alternative energy sources. A consumer’s body authorised by the Cabinet of Ministers issues a document confirming the purchase of energy generated from alternative energy sources. It also establishes that the wholesale electricity market must buy the green tariff electricity from alternative energy sources, and sell it directly to consumers or energy supplying companies.
Green tariff is defined as a special tariff for electricity generated at the power plants that use alternative sources of energy (except blast-furnace and coke gases; with regard to hydropower – at small plants only, i.e. with capacity up to 10 MWel).
The amended Law obliges the Ukrainian wholesale electricity providers to purchase electricity generated at the power plants that use alternative sources of energy through the green tariff. The green tariff was planned as a double average tariff for traditional electricity sold on the Ukrainian wholesale market in the year preceding the year of the tariff decision.
The state regulator (NKRE) defines the Green Tariff based on a formula. Special fed-in (green) tariffs were established for wind, solar, biomass, biogas, small hydro (<10MW) and geothermal power plants. Green Tariffs are fixed until 2030 with guaranteed electricity of-take by the Wholesale Electricity Market Operator. Green Tariffs are revised on a monthly basis to follow changes in UAH/EUR currency exchange rate. Green Tariffs are applied to new construction projects as well as renewable power plants operated before approval of the Law. Reduction of Green Tariffs by 10%, 20% and 30% for RES plants commissioned after 2014, 2019 and 2024 respectively. Local content requirement of 30% starting in July 2013 and 50% starting in July 2014 (for solar, wind and small hydro projects) with additional conditionality.
