Today, the Parliament is considering in the second reading the draft law No. 8449-d “On Amendments to Certain Laws of Ukraine on Ensuring Competitive Conditions for the Production of Electric Energy From Alternative Energy Sources”.

Experts from the Energy Sector Reform team of the Reanimation Package of Reforms support the provision of competitive conditions for the production of electric energy from renewable energy sources for large generation and stress the need to ensure the conditions for the priority development of small distributed generation.

In particular, we propose to take into account the following standpoints:

• Set a ceiling for facilities that are to participate in bids for all types of technologies, except for wind farms with capacity > 1 MW, while for wind farms > 3 MW is should be set as of January 1, 2020. Proposals to reduce the limit to 500 kW of the set capacity for RES facilities will make it impossible for small and medium enterprises to compete for the price of electricity production, as opposed to large facilities (large companies, including monopolists);
• Support the revision of the green tariff for industrial ground-mounted solar power plants with a capacity of > 1 MW which will be put into operation before the bids start. Introduction of large SPS capacities while maintaining a high rate of green tariff poses the risks of increased cross-subsidization in the electricity market and may endanger the stability of the entire renewable energy system;
• Support the simplification of green tariff setting for renewable energy facilities with the preset capacity of more than 50 kW but not more than 500 kW as determined in the first reading of the draft law. This provision supports small distributed generation which should be developed after 2030;
• Extend the green tariff for up to 15 years for those facilities that will be put into operation as of January 1, 2020 and are not obliged to take part in bids in accordance with Article 9-3 of the Law of Ukraine “On the Electricity Market”, which is proposed to be introduced by this Draft Law. Tariffs should be recalculated in accordance with the new terms of support based on the calculations made by the Regulator National Commission for State Regulation of Energy and Public Utilities – NCSREPU) with the disclosure of output data and methodology used;
• Introduce support for energy co-operatives which produce electricity from renewable energy sources for which a separate draft law needs to be developed.

NGOs and experts from the RPR’s Energy Sector Reform and Environmental Protection teams are totally opposed to the introduction of definition of “renewable refuse-derived fuel” for incinerated waste as one of the types of “alternative energy sources”.

According to previous RPR statements, energy generation from solid household waste in accordance with Directive 2009/28/EC is not covered by the need for state incentives.

This Directive states that countries should support energy generation from renewable energy sources only and these do not include household waste. Moreover, tariff incentives for incinerating solid household waste will create competition for investment, which will reduce the pace of development of solar power plants, wind farms and biomass power plants.

In addition, as per Directive 2010/75/EC on industrial emissions in the European Union, household waste incineration is permitted only on condition that a high level of environmental protection and human health protection is ensured, however, this has not been ensured on the legislative or technical level in Ukraine.

Incineration of solid household waste and the establishment of incentive schemes as if household waste was renewable energy source are unacceptable for a number of reasons:

• Incineration of solid household waste that contain not only waste of biological origin will endanger the health of the local population and lead to additional greenhouse gas emissions that result in global climate change;
• Almost all combustible solid waste contains plastics and other polymeric materials that are produced from oil, gas or coal. Therefore, incineration of plastic and polymeric products to generate energy is equivalent to burning fossil fuels, which are not renewable, in terms of atmospheric emissions;
• When plastic and other waste is incinerated, dangerous substances such as heavy metals, persistent organic pollutants and other toxins are emitted into the air. These pollutants lead to asthma, cancer, endocrine disorders, etc.

Given the aforementioned, RPR experts from the “Energy Sector Reform” and “Environmental Protection” teams call on the MPs during the adoption of the Draft Law No. 8449-d for the second reading:

• To support amendments aimed at stimulating the development of distributed generation from renewable energy sources;
• Not to make amendments regarding treating waste incineration as “renewable refuse-derived fuel” and not to allow such facilities to participate in bids and receive the same support the renewable energy sources receive.