Ukrainian Parliament Provides Investors with the Path to Complete Pending Wind Power Projects

On June 10, the Verkhovna Rada of Ukraine adopted in the second reading and in general the European integration draft law No. 5322 "On Amendments to Certain Laws of Ukraine on Prevention of Abuse prolongation Wholesale Energy Markets". The Draft Law transposes REMIT rules in Ukraine and in addition contains provisions that will allow to complete pending wind power projects and change “feed-in” tariff rates for wind power projects commissioned after July 1, 2023. The law is still awaiting the signature of the President.

Grid connection issues

Due to the full-scale russian invasion of Ukraine, a significant amount of wind power plant projects under construction were suspended – some of them founded themselves on the occupied territory and some faced hardships caused by the invasion.

Under the effective legislation, to retain the technical grid connection scheme, wind power projects had to be commissioned before December 31, 2022. Hence projects, suspended due to the invasion, were at risk as to keeping the grid connection scheme and especially the cost part of it.

To eliminate that risk, the Draft Law extends the tenure of the grid connection conditions of wind power plants until December 31, 2024. This secures the previously agreed grid connection schemes of the pending projects.

The Draft Law establishes that the described provisions have retrospective effect, hence once the Draft Law is signed into law by the President, the described extensions will be deemed effective starting from November 1, 2022.

“Feed-in” tariff extension

Under the effective legislation, in order to be eligible for the “feed-in” tariff, a wind power plant that had secured pre-PPA with the Guaranteed Buyer must be commissioned within three years following the date of such pre-PPA. Such pre-PPAs had been secured in the period between June – December 2019.

The Draft Law provides that the three years period will be extended to four years. Hence wind power projects commissioned by December 31, 2023 (depending on the date of the pre-PPA signing), would be eligible for the “feed-in” tariff.

The Draft Law keeps the same level of the “feed-in” tariff rates for wind power projects commissioned before June 30, 2023, while wind power projects commissioned after July 1, 2023, will benefit from a 17.5% reduced rate.