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| Mon, 2nd Mar 2020 14:35:00 |
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Ukraine unveils plan for retroactive FIT cuts |
The government has suggested PV plant operators accept a 'voluntary' 12.5% reduction in feed-in tariffs. If developers refuse, policymakers could impose 15-25% cuts, albeit with payment contracts extended five years. The drastic measures are being considered to reduce the cost of the state-owned Guaranteed Buyer body, which purchases all electricity generated in Ukraine from renewable energy facilities.
The Ministry of Energy and Environmental Protection of Ukraine is considering slashing feed-in tariffs (FITs) for existing large scale PV plants 15-25%, trade body the Ukrainian Association of Renewable Energy (UARE) has told pv magazine.
An announcement to that effect was reportedly made by Konstantyn Chyzhyk, deputy minister of energy and environmental protection, during the Ukrainian Energy Forum event.
The FIT cuts under consideration would see solar plants with a generation capacity of up to 10 MW shoulder a 15% reduction in payments with the figure rising to a 20% cut for 10-50 MW projects and 25% for larger facilities. Chyzhyk reportedly offered to soften the blow for developers by extending the term of affected ten-year contracts by five years.
The FIT program which expired at the end of last year paid large scale, ground-mounted PV projects €0.1502/kWh over a period of 10 years.
'Voluntary'
An alternative method of reducing the cost of subsidizing Ukrainian solar would see developers of PV projects of all sizes agreeing to take a "voluntary" 12.5% FIT reduction. Russian press agency Interfax reported Chyzhyk told the energy forum on Thursday: "The logic of this option is that such a reduction is much smaller than a decrease [combined with] extending the payment term. [Either] you pass restructuring, extending the payment term but at the same time you lower the feed-in tariff by a larger percentage, or you [do] not extend [the] payment term but at the same time take a slightly lower tariff reduction."
With Ukraine currently sparing solar developers costs of imbalance – the obligation to financially compensate the grid for over or under-production from their generation assets – the National Investment Council head of office reportedly warned, project owners who do not agree to voluntary cuts will face the introduction of such payments this year. Developers who play ball, however, will not have to pay such costs until 2022, Chyzhyk reportedly suggested.
The energy forum also reportedly heard the proposed retroactive FIT cut for wind power facilities would be 10% combined with five-year payment contract extensions.
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