January, 2020

The end of 2019 and early 2020 marked with several important changes in the renewable energy regulatory regime, including (a) changes to the Guaranteed Buyer procedure on purchase of renewable energy; (b) revisions to the Model PPA under the “green” tariff and adoption of the new Model PPA for the auctions regime; (c) adoption of the procedure for renewable energy auctions; and (d) cancelation of zero VAT imports of equipment for renewable energy projects.

Procedure on purchase of renewable energy

On 13 December 2019 the National Energy and Utilities Regulatory Commission (the Regulator) adopted changes to its Resolution No.641 dated 26 April 2019, which amend Procedure for purchase of renewable energy by the Guaranteed Buyer (the Procedure). Below is a list of some changes to the Procedure:

  • it applies both to the purchase of the renewable energy based on the “green” tariff and based on auctions;
  • resolution of disputes in international arbitration;
  • payment of contributions to the arbitration fund of the Guaranteed Buyer;
  • establishment of public register for renewable energy producers;
  • changes to the procedure for execution of PPAs;
  • pre-PPAs for most of the projects will not be executed after 1 January 2020;
  • changes to the forecasting and balancing.

Changes to the PPA

With its changes to the Resolution No.641, the Regulator also changed the Model PPA under the “green” tariff. The amended PPA includes changes to the rights and obligations of the parties regarding payment of contributions to the Guaranteed Buyer arbitration fund and includes amended arbitration clause. Moreover, the Regulator approved changes to the assignment clause. In particular, the PPA includes a list of terms when the Guaranteed Buyer may assign rights under the PPA.

All renewable energy producers shall amend its PPAs or pre-PPAs to bring them into compliance with the amended Model PPA. The Regulator has not started to amend signed PPAs because they conduct negotiations with the Regulator on implementation of some provisions of the new PPA.

On 13 December 2019, the Regulator also approved the Model PPA to be used by winners of renewable energy auctions.

Auctions procedure

On 28 December 2019, the Cabinet of Minister of Ukraine adopted Procedure on holding renewable energy auctions. Although the text of the procedure is not available.

Cancellation of zero VAT for RES imports

On 16 January 2020, the Parliament adopted Draft Law No.1210 amending the Tax Code. With these amendments the zero VAT for import of solar panels, invertors and wind turbines effective until 2022 have been cancelled. This change becomes effective after the official publication.

For further information, please contact Asters’ partner Yaroslav Petrov.

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