Green Tariff In Ukraine: Legal Advice

The development of green energy sector has recently taken an increasing share of the electricity generation market. In addition, the state introduces a certain incentives for encouraging producers of so-called “green energy”.

Usually, the development of “green energy” occupies a separate niche in business. In this case, it looks more like an additional option than a separate area for profit. However, this does not mean that the installation of solar panels cannot be developed as a separate business.

Today we will talk about the Green Tariff in Ukraine and the opportunities to use it for business needs.

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How to establish the process of “green energy” production?

Stage 1. Almost any economic activity in Ukraine requires starting its own enterprise. The optimal solution for “green energy” production is to start a limited liability company (hereinafter - LLC). Its key advantages in comparison with other forms of business are as follows:

  • Limited liability of the founders;
  • Easy bookkeeping.

Stage 2. Immediately after registration, you must find the appropriate land plot. Such a land plot should have the purpose of “energy land”, otherwise it will be too difficult and expensive to obtain and develop further documentation.

Such a land plot may be both in use and ownership - it does not matter for the “Green Tariff”.

Stage 3. Further, it is necessary to carry out a “scale assessment” of your own project. If, for example, you have an investor, he/she can organize a technical and economic assessment of your object (hereinafter - the project feasibility study), the development of which is better to entrust to a lawyer, because at the final stage of the project feasibility study you may have to “set the price of green tariff” for your company.

If you personally invest money in your project, then it’s time to start the development of technical documentation and at the same time to obtain other permit documents in the construction field (a commencement certificate, an operational readiness certificate, etc.).

Stage 4. After the development of the technical documentation, it is necessary to obtain documents from Ukrenergo and Obolenergo. These are the so-called Technical Specifications and the grid connection agreement.

We will talk in more detail about this process, which has a lot of features, in our next publication. Sign up to our articles so that you don’t miss important information.

The next steps will be to obtain an Electricity Generation License and approval of the Green Tariff, which we will talk about in more detail.

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Obtainment of the Electricity Generation License and inclusion in the electricity market

Please note! Persons with generating facilities of less than 5 MW and producers of electricity from other alternative sources with a capacity of more than 10 MW are not required to obtain the license.

Licensing requirement.

As for the equipment, the applicant must submit the following documents:

  • Documents on electrical generating equipment;
  • Relevant documents on the legal entity (the articles of association)
  • An application;
  • Statements for a license.

The recruitment of properly qualified staff is an important prerequisite for obtaining the license. This requirement is not stipulated in the licensing regulations, but it is specified in labour law.

For example, you shall recruit at least Group 2 electricians to work on electrical installations with a capacity of less than 50 kW, and Group 3 electricians to work on installations with a capacity of more than 50 kW.

After obtaining the licence, it is mandatory to be included in the Wholesale Electricity Market as a producer of electricity.

Here we will also mention such a stage as signing of the agreement with SE “Guaranteed Buyer”. For this purpose, it is necessary to prepare the following documents:

  • A certified copy of the Articles of Association
  • A copy of the director appointment order
  • A sample signature of the director
  • A copy of bank account opening certificate.

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Establishing the “Green Tariff” for the enterprise in Ukraine

One of the main requirements is the so-called “Ukrainian component”. Since 2014, the Ukrainian equipment for installations generating electricity from the sun, wind or biomass must be over 50%of all the equipment. This rule also applies to biogas since 2015.

There is also a separate requirement for solar modules, which must additionally consist of 30% of Ukrainian equipment. In all cases this “component” shall be confirmed by the Chamber of Commerce and Industry of Ukraine.

The next stage is the approval of the Green Tariff by the National Energy and Utilities Regulatory Commission (NEURC).

Documents to be submitted to the NEURC for establishing the Green Tariff:

  1. An information note, specifying all data regarding the company, its equipment and construction site (capacity, location, ownership, etc.).
  2. Electricity costing with the justification of costs and the estimated documentation.
  3. A copy of the declaration on construction.
  4. A copy of the previously mentioned technical specifications.
  5. A copy of the declaration (certificate) of construction completion.
  6. Documents confirming the Ukrainian component.

We can help you with preparing the final package of documents and explain the whole procedure for your case. If you want to establish the “Green Tariff” in Ukraine, don’t hesitate to contact us!

Publication date: 05/03/2020

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