Green Energy in Ukraine: New Opportunities for High-Growth Investment
This overview provides a brief introduction to the legal and regulatory framework for investment opportunities in green energy projects in Ukraine. In particular, we focus on the rules for operation of green energy projects in Ukraine and the measures aimed at stimulating the operation and development of green energy in Ukraine.
The overview outlines the existing rules, requirements and incentives available for developing green energy projects in Ukraine as well as those soon to become effective and of which an investor should be aware when planning a business strategy in this high-growth sector.
Application of Green (Feed-In) Tariff in Ukraine
To stimulate the operation and development of renewable energy sources in Ukraine, a "green" tariff, or special feed-in tariff as this may be known in other jurisdictions, was introduced in 2009. The feed-in tariff for green projects in Ukraine is one of the highest in the world, which makes investment into this sector very attractive.
On 1 January 2017, the capacity of units generating electricity from renewable energy sources (the RES) in Ukraine and applying the green tariff was 1,118 MW.
The following types of RES are eligible for the green tariff:
- Biomass (originating from wastes, as well as remains of agriculture and forestry sectors);
- Micro-/mini-/small hydroelectric power plants (i.e., having a generating capacity not exceeding 10 MW); and
- Geothermal energy.
Green tariffs apply to:
(i) legal entities generating energy from all types of eligible RES (the RES Producers); and
(ii) private households generating wind and solar energy (the PH).
Both new construction projects and existing renewable energy objects are eligible for green tariffs.