World Bank recommends that Ukraine’s energy regulator include nearly UAH 11 billion for RES settlements in Ukrenergo’s transmission tariff for 2022
NPC Ukrenergo’s tariff for the transmission of electricity, which is approved by the State Regulatory Commission for Energy and Utilities of Ukraine (NEURC), is expected to fully reflect the costs of the company for compensation of the cost of generating electricity from renewable sources, excluding 20% ââcompensation. of the state budget.
This advice is contained in a letter from the World Bank Regional Director for Eastern Europe (Belarus, Moldova and Ukraine) Dr. Arup Banerji to Energy Minister Herman Haluschenko, Finance Minister Serhiy Marchenko and the NEURC leader Valeriy Tarasiuk, the text of which is available for Interfax-Ukraine.
The World Bank recommended that the NEURC reflect the lack of 20% budget support for RES in the transport tariff for 2022 to ensure the financial sustainability of the sector and Ukrenergo. The World Bank has said it would be very grateful for immediate action on this important issue. The World Bank looks forward to continuing close cooperation in the energy sector, Banerji said in the letter.
At the same time, the regional director of the World Bank expressed serious concern that the proposed tariff for 2022 is still well below the level of cost recovery from Ukrenergo to meet the obligation to support development. renewable energies. According to him, the fact that NEURC did not take into account 20% of the estimated cost of green electricity in 2022 in its tariff proposal, referring to Law No.810-IX, which provides for support from the ‘State to the production of RE in these a volume, led to a lack of funds for payments of RES next year in the amount of 10.8 billion UAH.
At the same time, Banerji said that the position of the World Bank, like the Ministry of Finance, regarding the lack of capacity to finance renewable energy production from the budget had already been made clear in a letter. dated September 21, 2021. The World The Bank and the Ministry of Finance have made it clear that there is no possibility of such budget support and that the transport tariff should fully reflect the costs of meeting special obligations for the development of green energy. The state budget bill matches the specified letter from the finance ministry and does not include 20% for payments from renewable energy sources, said the regional director of the World Bank.
At the same time, he said that Ukrenergo at the end of October, following the tariff discussion, informed the World Bank that it would reflect all the necessary costs. According to Banerji, this became the basis for his refusal to take legal action regarding Ukrenergo’s breach of the terms of the Eurobond issue. As a result, an exceptional ground for non-application of remedies has been agreed upon regarding Ukrenergo’s non-compliance with the financial conditions specified in the loan associated with the issuance of Eurobonds by the company, he said. he stated in the letter.
Banerji said the default situation will negatively impact Ukrenergo’s ability to obtain new loans or issue bonds.
As reported, at the regulator’s meeting on Wednesday, December 1, a draft resolution on the approval of the Ukrenergo tariff in the amount of UAH 356.90 per MWh, which is 20% more than the current tariff, will be examined. Ukrenergo proposed to set a tariff of 458.83 UAH per MWh.