Paritet presentation gt_ renewable energy projects_nucc
Transcript of Paritet presentation gt_ renewable energy projects_nucc
Legal aspects of implementation of projects
under “green” tariff
NUCC MEETING19.01.2012
Borys Danevych, attorney-at-Law, Partner at PARITET law firm
Content
Incentives
Rates change/decrease in the future
Ukrainian content
Getting “green” tariff
Potential
NAER (the National Agency for Efficient Use of Energy Resources) estimate of the renewable energy potential
Types of renewable
energy sources
Annual energy potentialTheoretically
possible
Technically
achievable
billion
kWh
million
tce
billion
kWh
million
tce
Wind Power 270.0 97.2 41.7 15.0
Small Hydro Power 12.5 4.5 8.3 3.0
Biomass 407.0 50.0 162.8 20.0
Actual statistics
In the middle of 2009 the core legislation on the current feed-in tariff scheme (GT) was enacted
GT is currently approved for:8 companies operating 8 wind farms2 companies operating 2 biomass power plants17 companies operating 17 solar power plants31 companies operating 73 small hydro power
stations
1. Incentives for developmentof projects under GT
– exemption from import VAT and customs duties– exemption from corporate profit tax of profit derived from
sales of electricity produced from renewables till 2021– decrease of land tax for renewable energy power plants
by 75%– etc.
Tax incentives under the Tax Code
Feed-in tariff scheme or high “green” tariff (GT)
2. Minimal fixed GT rates
Type of energyPower station capacity and other factors
influencing the rate of GTRate of the
tariff (€ / kW)
Wind
less 600 kW* 0,0646
600-2000 kW* 0,0754
more 2000 kW* 0,1131
Solar energy
Power plants on ground surface 0,4653
Power plants on the roofs of buildings with power capacity exceeding 100 kW
0,4459
Power plants on the roofs of buildings with power capacity of up to 100 kW
0,4265
BiomassShould be at least partially of plant origin to be eligible
0,1239
Small hydropower plants
not more than 10000 kW 0,0775
2. Rates of “green” for otheralternative energy sources
Rates for all other alternative energy sources (including biomass with 100% of animal origin and biogas), are not legislatively established
NERC may approve rates of “green” tariff for them on the case by case basis based on economic substantiation
However, there are no actual examples of “green” tariff approved for such other alternative energy sources
2. Coverage of minimal fixed GT rate for biomass
Types of biomass (biogas)
Process of electricity generation
Eligibility to minimal fixed GT
Biomass of plant or at least partially of plant origin*
Steam turbine process Yes
Gasification and other processes where biomass is not used directly as a
fuel
No
Biomass of animal origin* Any processes No
Biogas, including landfill gas, waste gas similar biogases
Any processes No
*Under Draft Law No. 8028 of 28.01.2011 all types of biomass expected to have the same legal status in terms of eligibility but not biogas and gasification processes
2. Change/Decrease of GT in the future “Green” tariff is established until 2030 (grounds for
termination are also established by a Decree of NERC)
2014 – by 10%2019 – by 20%2024 – by 30%
Decrease of the current rates of “green” tariff for power plants commissioned (significantly upgraded) after:
GT rates are ≠ retail or average rates for producers of electricity
Fixed as of 01.01.2009 in EUR and linked to EUR/UAH exchange rate
Ukraine guarantees GT to commissioned power plants and purchase of all electricity produced by them
2. Change/Decrease of GT in the future
3. Ukrainian content requirement
The share (materials, works, services) in the total value of construction (if started after 2011) shall be at least:
• if commissioned till 2013 – 15 %• if commissioned till 2014 – 30% • if commissioned in 2014 and later – 50 %
For solar power projects value of Ukrainian materials in production of solar modules should be also at least
• since 2013 – 30% • since 2014 – 50 %
4. Approval of GT
NERC approves GT rates based on application and the package of documents regarding the constructed, commissioned and connected power plant
Terms for passing a decision by NERC:– Consideration of documents – 30 calendar days– Approval – 15 calendar days
GOOD NEWS! No Approval Fee
Conditions for Implementation of GT Projects
Set up a companyElectricity producer license Connection to the grid (compensation of
expenses related to grid connection)Participation in WEM and signing WEM
AgreementConclusion of agreement for sales of
electricity with State Enterprise “Energorynok”Execution of documentation for power plants
construction (documents on the use of land plots, project documentation, commissioning etc.)
Set up of a company
(charter shall provide that the
company produces
electricity)
Acquisition of rights in land Construction
Registration of ownership
Registration of leases
Registration of easements and
superficies
Change of designated purpose
License for electricity
production
Joining WEM and Signing WEM Agreement
Conclusion of agreement with Energorynok
GT approval by NERC
Sale of electricity at GT
Tax and customs duties breaks
Exemption from import VAT and customs duties
25% of required land tax
Maximal annual lease payments – 3% of appraisal value
Exemption from corporate profit tax till 2011
Receipt of initial data
Receipt of technical
conditions
Development of project
documentation
Examination of PD, if necessary
Registration of declaration re preparatory
works, if necessary
Registration of declaration re beginning of construction
Receipt of permission r e construction
works
Issue of Certificate on readiness for exploitation
Registration of declaration on
readiness
Registration of ownership
Connection to the grid
Connection of certain types of
wind farms
Connection of other power plants
Connection of cogeneration power plants
Conditions for Implementation of GT Projects
14 years in the Ukrainian market
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Actively involved into green energy legal environment for last 2 years
IFC expert on “green” tariff mapping in Ukraine
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