Over the next 5 years, it is planned to auction 3 GW of “green” generating capacities.
This was announced by Yuriy Shafarenko, Director of the Department of Renewable Energy and Alternative Fuels of the State Agency on Energy Efficiency in a comment to Kosatka.Media at the 11th Sustainable Energy Forum, which was held in Kyiv on October 16:
“We have submitted a proposal (for approval by the Ministry of Energy) for 5 years to divide 3000 megawatts: in 2020 - 400 MW, in 2021 – 500 MW, in 2022 – 600 MW and until 2024 an annual increase of 100 MW”, said Mr. Shafarenko.
Such a plan for quotas in the State Agency on Energy Efficiency is explained by forecasts regarding the volumes of commissioning of new capacities under the terms of preliminary agreements (PrePPA) and the fact that market participants will be careful in entering the first auction. Also, when planning quotas, the energy strategy was taken into account, according to which by 2035 the share of renewables in the energy balance should be 25%, or 20 GW.
“We believe that there will be fewer applicants at the first auctions – as long as the market enters into normal operation, until secondary legislation will be fully operational, all mechanisms will be worked out. Therefore, we took a smaller quota and increase it every year by 100 MW”, Shafarenko explained.
The assignment of quotas should be approved by the Ministry of Energy.
The largest quota is for wind generation
The State Agency on Energy Efficiency also proposes to distribute quotas for various types of generation. The department explains that solar generation has already developed to its limit, and bioenergy must be “tightened”. So, out of 400 MW offered for 2020, 100 MW is planned to be allocated for solar generation, 100 MW for biomass and biogas, 200 MW for wind generation. As it is known, two auctions will be held annually. So, at the first auction in 2020, 50 MW of solar power, 100 MW of wind power, 50 MW of biomass may be put up.
Price caps at auctions
“Price caps will be applied at auctions. The established maximum price will be a feed-in tariff valid for the period of an auction”, said Yuriy Shafarenko.
If there are no quotas before November 1, auctions will not begin
Head of the Ukrainian Wind Energy Association, Vice-President of the World Wind Energy Association, Andriy Konechenkov, noted that at a meeting at the Ministry of Energy and Environment held yesterday, it was reported that the first information on the volume of quotas would be announced after November 1.
“Today the whole market is really worried whether we will go to auctions or not”, Mr. Konechenkov noted. “I think that if they do not answer on November 1 (in terms of quotas – ed.), then there will be no auctions”.
As it is known, from January 1, 2020, Ukraine will change the support system for renewable energy – instead of a fixed feed-in tariff, auctions will be held to determine the price of electricity that will be produced by new capacities.