Changes in the Mechanism of Payment for Electricity under the “Green Tariff”

Friday, August 27, 2021
Changes in the Mechanism of Payment for Electricity under the “Green Tariff”

The Department of energy has drafted a bill that proposes an alternative to the "green tariff" , which provides fixed payments to producers of electricity from alternative energy sources

The draft law On Amendments to Certain Laws of Ukraine Regarding Stimulation of Electricity Production from Alternative Energy Sources on the Market Basis provides for the introduction of a Feed-in-Premium system, or contracts for difference, for producers from alternative energy sources.
This mechanism is proposed to be introduced both for existing sales contracts and for contracts to be entered into by winners of auctions, instead of fixed payments under the Feed-in-Tariff "green tariff".

"Under this model, RES producers would be able to act directly as market participants, selling electricity on their own, optimizing their generation revenues and reducing their imbalances. At the same time, these producers will be entitled to compensation from a guaranteed buyer in the form of the difference between the set green tariff or auction price and the market price," explained first deputy energy minister Yuriy Vlasenko.

Producers will be motivated to create new separate balancing groups, which will be able to manage the imbalance of their own portfolio of facilities in real time and, to avoid imbalances, introduce new approaches and technologies of forecasting, energy storage systems and demand management, contributing to balancing the power system.

Total renewable power capacity:

At the end of last year, total renewable electricity capacity grew by 22% to 8,5 GW.
In 2020, 1,2 billion euros were invested in 1.6 GW of new generating capacity from renewable sources. In 2019, investments amounted to $3,7 billion, which allowed for the construction of an additional 4,5 GW of capacity.

Under the Feed-in Premiums scheme, electricity from renewable energy sources (RES) is usually sold on the electricity spot market, and RES producers receive a premium over and above the market price for their electricity production.


You will be interested