Improving the procedure of "green" auctions according to European standards will ensure the predictability of the market for RES investors - German Galushchenko

Created date

17 08 2022

The Cabinet of Ministers adopted a resolution developed by the Ministry of Energy "On Amendments to Resolutions of the Cabinet of Ministers of Ukraine No. 420 of May 23, 2018 and No. 1175 of December 27, 2019."

The document improves the procedure for holding "green" auctions for the construction of renewable energy facilities, taking into account European standards and practices. The auction procedure will become more flexible, transparent and efficient. It provides an opportunity to reduce the price of "green" electricity on a competitive market basis, allows the state to regulate the amount of introduction of new renewable energy capacities, their types (SPP/WPP/biomass) and locations in accordance with the capabilities and needs of the power system.

Thus, the resolution introduced the schedule of auctions for the next year and the establishment of indicative indicators of quotas for 4 years.

"These changes will provide predictability to the renewable energy market, which will enable long-term planning for investors. Current and potential producers will see the size of the market, so they will be able to plan their activities and investments in advance," said the Minister of Energy German Galushchenko.

The resolution also provides for the possibility of forming additional quotas in case of intensification of certain market segments and increased requests from investors.

The document introduces the possibility of holding auctions with the establishment of the maximum capacity of the renewable energy facility. This will prevent monopolization of the industry and promote the development of small and medium-sized businesses that install small capacity facilities.

In addition, the possibility of establishing regional quotas is provided, which allows to optimize the location of renewable energy facilities taking into account the technical features of the transmission system, the regional balance of supply and demand, the energy potential of RES in individual territories. This will contribute to the construction of RES facilities in energy-deficit regions, zones with free-to-connect capacities, to conduct separate auctions as part of stimulating the socio-economic development of regions

The possibility of holding open auctions with transparent prices and volumes of electricity put up for auction has also been introduced. This will help increase competition during auctions, and, as a result, lower the price for "green" electricity.

The resolution also simplifies the requirements for participation in auctions - the grounds for returning a bank guarantee to auction participants have been clarified, and the requirements for banks that provide bank guarantees have been softened. This will increase the attractiveness of auctions for investors.

Improving the procedure of "green" auctions will contribute to the further development of RES in Ukraine on a competitive basis and the fulfillment of the strategic goal and international obligations of the state to decarbonize the economy.