Ukrenergo announced a deficit of funds for a feed-in tariff

At the end of 2019, Ukrenergo may have a shortage of funds to compensate Guaranteed Buyer and universal service providers for the expenses of paying a feed-in tariff.  According to the company's estimates, its forecast volumes will amount to 1.58 billion UAH (9% of all expenses).  This was reported by the press service of the company.  

The deficit may be due to the fact that payments under the transmission tariff in the second half of 2019 are received unevenly and not in full.  According to the results of July-September, the debt is 1.09 billion UAH or 11%.  The optimistic forecast of the level of payments in the second half of 2019 is generally 91% (debt – 9%).

Also, in July-August, the tariffs for five enterprises were suspended in court, which affects the lack of funds to compensate for a feed-in tariff.  They charged a fee for the previous tariff – 57.4 UAH/MWh.  At the same time, it was stipulated in the tariff calculation that companies would pay at higher rates in force at that time: 347.14 UAH /MWh in July and 116.54 UAH /MWh in August.

“As a result, the total shortfall in funds for July-August due to the suspension of tariffs through the court is 321.4 million UAH.  These funds can be received in payment of the transfer tariff only after the relevant decision of the courts”, the statement said.

Ukrenergo noted that in the second half of the year total expenses should exceed revenues by 1.583 billion UAH – these are the funds that must be paid in favor of Guaranteed Buyer and the universal services provider to compensate for a feed-in tariff.  However, Ukrenergo can compensate for the costs of a feed-in tariff only in the amount of 503 million UAH due to account balances that have accumulated in the company on July 1, 2019. The projected underpayment to Guaranteed Buyer in this case will be 1.079 billion UAH.

Ukrenergo noted that the problem can be solved by legislative regulation: Guaranteed Buyer must use its profit to pay a feed-in tariff as part of the PSO mechanism.

It is also necessary to solve the issue of introducing liability for imbalances of renewable energy producers and increase the fine for late payment of electricity transmission services.

“Finally, we hope that the National Energy and Utilities Regulatory Commission will win in court cases that appeal the tariff for transmission services in July-August 2019”, said Volodymyr Kudrytsky, First Deputy Chairman of the Board of NPC Ukrenergo.

Tags: The Cabinet of Ministers, contracts, renewable energy, tariffs, solar energy, wind energy, court, legislation, electricity, energy market, Ukrenergo, feed-in tariff, electricity market, Guaranteed buyer

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