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  • Ukrenergo proposes to agree with NEURC and the Ministry of Energy the amount of compensation for the “green” tariff

    As today there is no single approach to forecasting costs of NPC Ukrenergo for compensation for the “green” tariff to SE Guaranteed Buyer and universal service providers, CEO of the company Vsevolod Kovalchuk proposes to discuss this issue at a joint meeting with NEURC and the Ministry  of Energy and Environmental Protection of Ukraine. He stated this at the meeting of National Energy and Utilities Regulation Commission on November 19, 2019.

    Today, all mentioned entities calculate the forecasting RES “green” electricity tariffs in different ways. As a result, Ukrenergo, NEURC and Guaranteed Buyer have different amounts that differ significantly from each other. Such discrepancies are due to the complexity of forecasting this indicator.

    “Legislative amendments that could regulate the issue of compensation for the “green” tariff at the expense of Ukrenergo have not yet been approved. At the same time, the Ministry  of Energy and Environmental Protection expects that in 2020 the deficit of funds for electricity payment to RES producers may amount to 13-14 billion UAH. This issue is very important for Ukrenergo, as the amount of the “green” tariff compensation affects the company’s tariff increase. Therefore, I ask NEURC together with Guaranteed Buyer, Ukrenergo, and the Ministry  of Energy and Environmental Protection to hold a joint meeting on this issue as soon as possible so that we could determine an acceptable amount of this compensation,” said Vsevolod Kovalchuk.

    He also noted that in June 2019, Ukrenergo and NEURC did not support the Government’s decision on the mechanism of placement of special obligations (PSO), which includes “green” tariff compensation. Today, there is a reason to believe that at the beginning of the next year, the current PSO model will be changed. So, it is likely that any amount that will be agreed today for the transmission tariff for this compensation will need to be revised in 2020.

    “Ukrenergo would be pleased if there was political will to relieve the company of the responsibility for compensating the costs for the green tariff at the expense of the electricity transmission tariff. This obligation significantly increases the amount of the latter, and consequently causes considerable receivables of market participants to Ukrenergo. That is why we support the removal of special obligations from NPC Ukrenergo for such compensation,” added Vsevolod Kovalchuk.

     The obligation of Ukrenergo to compensate the costs of Guaranteed Buyer and universal service providers is enshrined in the Law of Ukraine “On Electricity Market” (with amendments made by the Law of Ukraine No. 2712-VIII of April 25, 2019). The PSO implementation mechanism, in its turn, was approved by the Resolution of the Cabinet of Ministers of Ukraine No. 483 of June 5, 2019.

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