Please find below information about some recent legislative initiatives and updates that could be of interest for investors in renewable energy sources and energy projects in Ukraine. The changes represent another step towards the development of green energy in Ukraine and is aimed at implementing amendments set forth in Law of Ukraine No. 3220-IX dated June 30, 2023 On introduction of changes to certain laws of Ukraine as to recovery of energy safety and green transformation of the energy system of Ukraine (the “Law”).

Procedure on implementation guarantees of origin for renewables

General information

On February 27, 2024, the Cabinet of Ministers of Ukraine (the “CMU”) adopted Resolution No. 227 On the introduction of guarantees of origin of electricity generated from renewable energy sources, which took effect on March 5, 2024. It replaces previously existing secondary legislation on GOs (which never really worked in practice) and sets out the procedures for establishing a regulatory framework for guarantees of origin for electricity generated from renewable energy sources (GOs), in particular, the following procedures:

• Procedure for issuing, circulating and redeeming guarantees of origin for electricity generated from renewable energy sources (the GOs Procedure)
• Procedure for determining the environmental value of electricity produced from renewable energy sources

A key document is the GOs Procedure, which sets out the following key mechanisms:

• Functioning of the National Register of Guarantees of Origin (the Register)
• Registering of an electricity facility or its partfor obtaining GOs
• Issuing of guarantees of GOs
• Circulation of GOs
• Cancellation of GOs

The Register

The Register is intended to confirm the origin of electricity produced from renewables by (i) a business entity that produces electricity from renewable energy sources, (ii) a consumer that has installed a generating facility intended for the production of electricity from renewables to ensure its own consumption or (iii) by a prosumer. The Register will further organize the issuance, circulation, cancellation and expiration of GOs.

Users submit their requests electronically to the Register to issue, circulate or cancel GOs. All listed actions with GOs must be carried out exclusively through the software used for the operation of the Register. The Register is maintained in Ukrainian, but its interface should allow for at least two languages—Ukrainian and English.

The Register is held and managed by the National Energy and Utilities Regulatory Commission (the Regulator). The Regulator will provide applicants and users open and free access to the Register. The Register will be accessible via the Internet.

The Regulator will further ensure that certain information is publicly accessible, in particular:

• A list of Register users
• A list of registered generating units
• The number of GOs issued
• The number of transferred GOs in Ukrainian territory
• The number of transferred GOs from Ukrainian territory to the territory of other countries
• The number of transferred GOs from other countries to Ukraine
• The number of cancelled GOs
• The number of annulled GOs

For the period of martial law in Ukraine, certain information in the Register may be restricted.

Persons entitled to register GOs

The following entities are obliged to register GOs in the Register:

1. Business entities that sell electricity to the guaranteed buyer at a feed-in tariff or provide a service to a guaranteed buyer using a market premium mechanism
2. Universal service providers
3. The guaranteed buyer

Users register their GOs by creating an account in the Register.

Other business entities and consumers (except for prosumers who have concluded an agreement with a universal service provider on the purchase and sale of electricity at the feed-in tariff) may register GOs in the Register voluntarily.

Registering a generating facility in the Register

The user of the Register, or the user’s responsible persons, have the right to register a generating facility (generating facilities of producers, consumers and prosumers) by submitting information to the Regulator about the facility, as envisaged in the GOs Procedure. Business entities that sell electricity to the guaranteed buyer at a feed-in tariff or that provide a service to a guaranteed buyer using a market premium mechanism are obliged to register their facility. Information submitted for the registration of the facility will become publicly available on the Regulator’s website.

Creating GOs and required content

To create the GOs, PrJSC NPC Ukrenergo (Ukrenergo), which manages commercial electricity metering, must upload to the Register certified commercial metering data from the commercial metering points of registered generating facilities, as well as information from the metering points of generating facilities that are part of aggregated generating facilities, by the 20th day of the calendar month following the operational month. GOs are generated automatically using the functionality of the Register solely on the basis of certified commercial accounting data entered by the commercial accounting administrator.

GOs are issued electronically in megawatt hours, based on the produced electricity supplied to the power grid—including electricity supplied to the transmission and/or distribution system and/or to the grid of other owners, in particular via a direct line, or generated and used for own consumption of electricity during the operational month.

An GOs account for the registered user is created on the basis of an application in electronic form, which is submitted to the Regulator.

GOs must include the following information:

• Type of renewable energy source used in the electricity generation process
• Start and end date of electricity supply to the grid and/or production for own consumption
• Location, installed capacity and characteristics of the generating facility
• Information on the investment support mechanism used/applied for the creation of the respective generating facilities, or the type of support for the production of electricity from renewable energy sources (feed-in tariff, market premium mechanism, provision of services to ensure the stability of electricity prices) applied to such generating facilities
• Commissioning date of the generating facility
• Date and country of issue of the guarantee of origin
• Environmental value
• Unique identification number

GOs: term of validity

GOs must be valid for 12 calendar months following the month in which electricity covered by the GOs was produced. The guarantee of origin must expire within 18 calendar months following such month. If the GO is not cancelled within 18 calendar months following the month in which electricity was produced, it must be annulled.

Procedure for transferring GOs

Any registered user may transfer GOs using the Register. This is effected by creating an electronic request for the transfer of the guarantee of origin through the user’s account, which must contain the following information:

• Number of GOs to be transferred
• Registration number of the account containing GOs to be transferred
• Registration number of the account of the recipient of the GOs
• The GOs owner’s consent for the transfer
• Consent to the transfer of the GOs from of the GOs recipient

To receive a GO, the recipient (who is a registered user) will first receive an electronic GO transfer request in their account and must, after receiving in their account an electronic GO transfer request, give their consent to receive it from the GO owner.

A GO that has been withdrawn from circulation in connection with its cancellation (use) or in the event of its annulment may not be transferred.

A GO issued for electricity produced at generating facilities of electricity producers and active consumers that was sold to the guaranteed buyer under the feed-in tariff (or in respect of which the service is provided using the market premium mechanism) becomes the property of the guaranteed buyer simultaneously with the purchase and sale of the electricity.

GOs cancellation

A GO must be cancelled if it is used to disclose information to the electricity consumer about the share of electricity generated from renewable energy sources in the consumer’s overall structure of the electricity consumption balance, or if such electricity was directly consumed by the consumer.

The GO owner may also cancel it to confirm the following:

1. The electricity produced/performed/provided in whole or in part was produced/ performed/provided using electricity generated from renewable energy sources.
2. The electricity generated by the generating facility and consumed for own needs comes from renewable energy sources.

To cancel GOs, the owner must submit through the Register account an electronic request to the Regulator indicating, in particular, the number of GOs to be canceled and the ultimate purpose of their cancellation, in particular, the name of the beneficiary in whose favor the GOs are cancelled and the beneficiary’s location.

International recognition of GOs

The procedure for transferring GOs outside of Ukraine and for recognizing GOs issued outside Ukraine, as well as for extra-territorial recognition (including cancellations) of Ukrainian GOs that were issued in Ukraine is to be determined by international treaties. As at the date of this update, no such international treaty has been entered into. In addition, there is no software in place enabling such operation.

Amended procedure for auctions for renewable energy projects

On March 1, 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 232 On amendments to the resolutions of the Cabinet of Ministers of Ukraine dated May 23, 2018 No. 420 and 27 December 2019 No. 1175. The key changes of the amendments apply to Resolution No. 1175 dated December 27, 2019, which sets out the competitive conditions for stimulating the production of electricity from alternative energy sources and the procedures for holding auctions for allocation of the support quota. It sets out the following, in particular:

• The market premium mechanism applicable to auctions winners
• Certain specifics of determining the auction lot and its price
• Criteria for including state-owned and municipally owned real estate or parts thereof (roofs and/or facades of buildings and other capital structures) for auctions involving structures as well as other peculiarities, if required by the auction (requirements to install energy storage, purchase of certain hours of production, amount of the auction price to be fixed in euros, etc.)
• A list of additional requirements for the announcement of an auction involving facilities
• The list of documents to be provided by the winner to the guaranteed buyer (land title document, grid connection agreement, etc.)
• Criteria for determining persons associated with the aggressor state
• Additional grounds for refusing to sign the agreement with the auction winner (in particular, a virtual PPA is signed regarding the suggested facility, the suggested capacity of the facility exceeds the auctioned one, technical parameters of the energy storage, if required by auction rules, are not compliant with the respective rules
• A specification of certain aspects of grid connection and the use of bank guarantees in auctions
• A list of complaints related to auctions subject to judicial review (loss of the status of the auction participant, protocols on the auctions results and refusal to enter into the agreement on the basis of the auction, etc.)

This information does not constitute legal advice and is merely the opinion of the author.