The ratio is expected to improve
within the next few years, and according to the target program
for energy efficiency for the years 2010-2015, it should reach
the 10% mark by 2015. And by 2030, the share of the renewable
energy in the state energy balance shall amount to 20%,
following the energy strategy up to 2030.
Potential
Experts claim the proven
technological, climatic and geographic potential allowing for
the renewable energy used in Ukraine to comprise 50% of the
total amount of power consumed currently, with the potential of
wind plants alone being estimated at 16 GW.
Many major investors are already
making use of the favorable climatic and geographic conditions
of Ukraine and the high feed-in tariffs for their profit. For
example, during the period from June to October, a number of
solar plants (20 MW each) constructed by the Austrian company
Activ Solar in Crimea came on line. The total capacity is
expected to reach 80 MW, which would suffice to provide 20,000
households in the region with electricity. By 2018 two windparks
with the total capacity of 1.2 GW are to be built in the Donetsk
region. The estimated cost of the project for the Ukrainian
investors amounts to about 2 billion EUR. Tax concession and low
wage costs make Ukraine an even more attractive facilities
location for the production of renewable energy, as proven by
enterprises like the German company Fuhrländer AG, planning to
construct wind plants with total capacity of 2.5 MW.
Feed-in tariffs
The “Green” tariff applies to the
producers of electricity from renewable energy sources. It is
set by the NERC (National Electricity Regulatory Commission of
Ukraine) for every producer individually. The “Green tariff” is
effective till 1 January 2030. As the reference value for the
calculation of the “Green” tariff serves the tariff rate for the
second class voltage consumers as of January 2009 (0.5846 UAH,
0.0538531 EUR at that time). The aforementioned value is
multiplied by the “Green” tariff coefficient for the respective
type of energy production. For hydropower and solar energy
production, the top consumption hours coefficient according to
the three-zone-tariff (1.8 at the time of reference) is used as
the multiplier, instead.
The coefficients for individual
types of energy generation are as follows:
4.8 – surface facilities for solar
energy generation
4.6 – roof facilities for solar
energy generation with the capacity over 100 kW
4.4 – roof facilities for solar
energy generation with the capacity of 100 kW or less
2.3 – biomass energy
2.1 – windpower facilities,
capacity over 2000 kW
1.4 – windpower facilities,
capacity of 600-2000 kW
1.2 – windpower facilities,
capacity of 600 kW or less
0.8 – hydroenergy generation
facilities, capacity up to 10 MW
The following feed-in tariffs for
the producers of renewable energy were assigned by NERC for
November 2011:
Hydropower – 0.8539 UAH (about
0.077 EUR)
Windpower (capacity over 2000 kW)
– 1.2454 UAH (about 0.11 EUR)
Biomass energy – 1.3640 UAH
(about 0.12 EUR)
Solar energy generation, surface
facilities – 5.1238 UAH (about 0.46 EUR)
Solar energy generation, roof
facilities (<100 KW) – 4.6968 UAH (about 0.42 EUR).
As far as the biomass energy is
concerned, the “Green” tariff applies solely to the electricity
produced from biomass of plant origin. In November, the total
number of 55 energy producers (94 energy generating facilities)
qualified for the “Green” tariffs.
The “Green tariff” coefficient
will be reduced by 10%, 20%, and 30% for the power generation
facilities to be deployed or substantially renovated (i.e., the
renovation should constitute not less than 50% of the initial
construction cost) after 2014, 2019, and 2024, respectively.
Materials, technical equipment and services used for the
facilities construction are to be of Ukrainian origin (not less
than 15% of the total cost since 2012; not less than 30% since
2013; and 50% since 2014). The solar modules used for generation
of solar energy, shall be manufactured with the minimum domestic
content of 30% in 2013, and 50% starting 2014.
The “Green” tariff is secured from
the devaluation of the Ukrainian currency: in the event of
devaluation of hryvnia, the tariff will be calculated based on
the exchange rate as of 1 January 2009 (1 EUR = 10.85546 UAH).
Tax concession
Electricity production in Ukraine
is subject to licensing. Both enterprises possessing technical
means that are used to generate energy from alternative sources
for in-house power supply (with the capacity of 10 MW or more),
and production facilities generating electricity from
alternative sources for wholesale, regardless of the capacity
are obliged to apply for a license. The electricity produced
from alternative energy sources, however, can also be sold
directly to the end consumers. In the event of wholesale, the
priority purchase right is granted to the state enterprise
Energorynok enjoying the monopoly position. For the electricity
to be fed in, a further agreement with local power providers (“Oblenergo”)
shall be concluded. The above mentioned power providers cannot
refuse electricity feed-in, and the costs on electricity
distribution are covered for in their investments plans.
The earnings of enterprises from
electricity production, on condition that they use biofuel, are
tax-free up to 2020. Additionally, 80% of earnings gained out of
sale of self-produced goods (if listed among the goods which are
subject to tax concession, as approved by the government) in
Ukraine are exempted from taxation. In particular, the tax
concession concerns the following categories of goods: equipment
working on renewable energy sources or used for the generation
of the “green” energy; energy-efficient equipment and materials,
as well as products allowing to save fuel and energy resources.
When sold in Ukraine, the
equipment utilized in the field of renewable energy production
is VAT-free. No import duty is imposed on equipment and
materials intended for the generation of “green” energy, on
condition that the aforementioned will be used for manufacturing
own products and no equivalent equipment or materials are
manufactured in Ukraine.
The land tax rate on land plots
used as facilities sites for renewable energy generation
constitutes only 25% of the current tax rate.
This
article was contributed by
Igor DYKUNSKYY, LL.M.
(Augsburg) with
bnt
attorneys-at-law, Kyiv, Ukraine.
Igor can be reached at
igor.dykunskyy@bnt.eu.
View points expressed in the article are those of the Author and
not those of EnvironBusiness. To obtain further details please
contact the author.
