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Ukraine’s RES producers ask government to respect MoU reducing feed-in tariffs

Members of the European Ukrainian Energy Agency (EUEA) and the Ukrainian Wind Energy Association (UWEA) are asking Ukraine’s government to speed up the implementation of its commitments under a Memorandum of Understanding (MoU) signed earlier in June which substantially reduced the feed-in tariffs (FITs) for renewable energy producers.

The government made a firm commitment to both the associations to restore full payments by the State enterprise Guaranteed Buyer to renewable energy producers. However, the Guaranteed Buyer has not yet established payment discipline, as was promised. On the contrary, it has only covered its payment obligations for electricity delivered in August and payments for September deliveries are now at just 27 per cent of its obligations.

Even more concerning, the Guaranteed Buyer has provided forecasts whereby the average level of payments for the period from August to December 2020 would be only 56 per cent of its obligations, which would lead to an accumulation of an additional 9.6 billion hryvnia (288 million euros) of debt to renewable producers by the end of 2020.

Members of both associations believe that necessary funds to restore the solvency of the Guaranteed Buyer may come from a combination of TSO transmission tariff increases and a 20 per cent State budget co-financing of the FIT payments.

While the Parliament’s Committee on Energy, Housing and Utility Services has recently proposed to include 20 per cent co-financing of renewables obligations in the State budget for 2021 the Ministry of Finance has not yet expressed support for the necessary allocation of such funds to the State budgets for 2020 and 2021.

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