On May 2, the Verkhovna Rada supported the draft law on amendments to some laws of Ukraine regarding the restoration and green transformation of the energy system of Ukraine in the first reading, signaling a positive step towards achieving the country's renewable energy goals.
Draft Law 9011-D encompasses changes to legislation that are aimed at creating favorable conditions for attracting investments in rebuilding the energy system through the use of decentralized renewable energy sources, as well as the creation of new market mechanisms such as net billing, feed-in premium, and certificates of origin for “green” electricity. These measures are expected to drive the development of renewable energy sources and increase their share in Ukraine's energy mix to at least 27% by 2030, as per the government's plans.
“The adoption of legislative changes aimed at restoring and transforming Ukraine's energy system with green solutions will allow our country to take a quantum leap towards the decarbonization of the energy sector. It will also contribute to the rapid economic recovery and strengthen the energy security of not only Ukraine but the entire European region,” says Andrii Zhupanyn, the Chairman of the “United for Recovery” inter-factional parliamentary association.
The implementation of those legislative tools that encourage the production of renewable energy and are already functioning within the EU, such as net billing, feed-in premium, and certificates of origin, is crucial to unlock the potential of renewable energy in Ukraine.
“A third of renewables in Ukraine's energy mix will require the construction of 10 GW and at least $10 billion in investments by 2030,” says Oleksandr Martyniuk, head of the Ministry of Energy's Directorate for Electricity Complex and Electricity Market Development.
In addition to generating electricity from solar and wind, bioenergy - particularly the production of renewable gasses - holds significant potential. When combined with highly efficient cogeneration, biomethane could become a crucial component in the energy transition for both Ukraine and the EU.
“For the first time in the country's history, during a full-scale bloody war, Ukraine is launching an energy revolution through changes in legislation that enable restoration and green transformation of the energy system. This is a great victory over Russian terror. But we can do more. We have to completely get rid of the Soviet legacy in energy and industry by 2030 and become a guarantor of Europe's energy independence and security, a center for green investments and an engine of the EU's energy transition. This is incompatible with extending the service life of coal-fired power plants and CHPs and increasing fossil gas production,” says Svitlana Romanko, founder and director of Razom We Stand.
The net billing system will enable households or businesses that have renewable power generation to feed the excess electricity into the grid, and such active consumers (or prosumers) will only have to pay the difference between the consumed and supplied electricity. In Ukraine, the implementation of this mechanism can help to enhance the resilience of energy supply to households, small enterprises, and public services without increasing the financial burden on the budget.
The next instrument for promoting renewable energy in Ukraine is the Contracts for Difference (CfD) system. Under this system, renewable energy producers can receive the difference between the feed-in tariff or auction price and the market value of electricity. Auctions for the construction of renewable energy facilities are common practice in the EU under feed-in-premium models and are expected to be launched in Ukraine.
The creation of a system of guarantees of origin for electricity generated from renewable sources is another important tool. This system is particularly relevant for businesses aiming to reduce emissions from their energy consumption. The ability to purchase green electricity is vital for decarbonizing production chains in line with the GHG protocol, an international standard for calculating greenhouse gas emissions.
“Providing guarantees of origin is a crucial opportunity for exporters in light of the introduction of the CBAM carbon adjustment mechanism, which the European Parliament approved on April 18th. The EU was Ukraine's main partner in industrial product purchases last year, and the plans to export electricity to Europe make the issue of specific carbon emissions per unit of energy produced even more pressing,” says Olha Yevstihnieieva, advocacy manager at Razom We Stand.
Jason Kirkpatrick, Senior Communications Manager,
Razom We Stand, [email protected]
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