Basic provisions of DRAFT Law of Ukraine «On amendments to certain laws of Ukraine regarding the incentives for power production from alternative energy sources» N 2946 from 26.04.2013 Authors: Medianyk V.Yu., Blyznyuk A.M., Fedoriak G.D., Sal’do V.V., Popesku I.V.
Correction of definition of the term “biomass” Active Law of Ukraine «On Power Industry»: Biomass is a non ‐ fossil biologically renewable substance of organic origin in the form of wastes of forestry and agriculture (crop and livestock sectors), fishery and technologically related industries, which is subject to biodegradation, as well as the part of industrial and municipal waste, which is able to biologically decompose SUGGESTED: Biomass is a biologically renewable substance of organic origin which is subject to biodegradation ( products, wastes or residues of forestry and agriculture ( crop and livestock sectors), fishery and technologically related industries as well as the part of industrial and municipal waste, which is able to biologically decompose
Abolishment of the requirement concerning the local content share of equipment, materials and services in the total project cost Requirements on the local content share, which come into force on 01.07.2013 (Article 17 ‐ 3) Power from biomass : not less than 30%, if construction of an object started after 01.01.2012 and the object will be commissioned after 01.07.2013; not less than 50%, if construction of an object started after 01.01.2012 and the object will be commissioned after 01.07.2014 Power from biogas: not less than 30%, if construction of an object started after 01.01.2012, and the object will be commissioned after 01.01.2014; not less than 50%, if construction of an object started after 01.01.2012 and the object will be commissioned after 01.01.2015 SUGGESTED: To abolish any requirements concerning the local content share for the facilities that produce power from biomass, biogas, municipal waste and by co ‐ firing biomass with fossil fuels .
Increase of “green” tariff (GT) factor for power produced from biomass Comparison of “green” tariff for power from biomass in Ukraine and some EU countries: under the existing factor К =2.3 Ukraine occupies the 7th place under the suggested factor К =2.7 Ukraine will occupy the 6th place Active GT factor for the objects which are commissioned : Law of Ukraine «On up to from from from from Power Industry»: 31.03.2013 01.04.2013 to 01.01.2015 to 01.01.2020 to 01.01.2025 to included 31.12.2014 31.12.2019 31.12.2024 31.12.2029 Power from biomass 2.30 2.30 2.07 1.84 1.61 Suggested: Power from biomass 2.30 2.70 2.43 2.16 1.89
Increase of “green” tariff (GT) factor for power produced from biogas At existing GT factor ( К =2.3 ) pay back period of biogas projects amounts >10 years. For pay back period of 7-10 years GT factor should be not less than 3.0 for biogas, produced from biomass of agricultural origin, and 2.7 – for all the rest types of biogas. Active Law of Ukraine GT factor for the objects which are commissioned : «On Power Industry»: up to from from from from 31.03.2013 01.04.2013 to 01.01.2015 to 01.01.2020 to 01.01.2025 to included 31.12.2014 31.12.2019 31.12.2024 31.12.2029 Power from biogas ‐‐‐ 2.30 2.07 1.84 1.61 Suggested: Power from biogas, produced 3.00 3.00 3.00 2.70 2.40 from biomass of agricultural origin Power from all the 2.70 2.70 2.70 2.43 2.16 rest types of biogas
Introduction of “green” tariff for power produced from municipal waste � Renewable share in municipal waste amounts > 50% � Majority of EU countries legally support energy use of municipal waste � GT on power, produced from municipal waste is needed for possibility of cost- effective construction of waste incineration plants in Ukraine GT factor for the objects which are commissioned* : Active Law of Ukraine «On up to from from from 01.01.2020 from 31.03.2013 01.04.2013 to 01.01.2015 to to 31.12.2024 01.01.2025 to Power Industry»: included 31.12.2014 31.12.2019 31.12.2029 No option Power from municipal waste Suggested: Power from municipal --- 3.00 3.00 2.70 2.40 waste * Subject to compliance with maximum permissible values of polluting emissions
Introduction of “green” tariff for power produced by co ‐ firing of biomass with fossil fuels Main advantages of the introduction of biomass co ‐ firing on the coal units of TPP s are: ‐ high efficiency of the conversion of fuel energy: electrical efficiency is up to 38%; ‐ possibility to use different types of biomass and organic part of municipal waste; ‐ reduction of polluting emissions to atmosphere; ‐ possibility to realize projects with minimum capital costs and implementation period; ‐ possibility for quick increase of RES share in the energy balance of the country. GT factor for the objects which are commissioned : Active Law of Ukraine «On up to from from from from 31.03.2013 01.04.2013 to 01.01.2015 to 01.01.2020 to 01.01.2025 to Power Industry»: included 31.12.2014 31.12.2019 31.12.2024 31.12.2029 No option Power from biomass by its co-firing Suggested: Power from biomass by its co-firing * --- 1.90 1.90 1.71 1.52 * GT – only for amount of power energy, produced from biomass. Biomass share at co-firing with fossil fuels isn’t limited.
Introduction of non ‐ discriminatory approach for biogas plants, commissioned before 01.04.2013 In current Law of Ukraine “On Power Industry” GT factor is set only for biogas plants, commissioned not before 01.04.2013 : • К =2.30 for biogas plants, commissioned from 01.04.2013 to 31.12.2014 • К =2.07 for biogas plants, commissioned from 01.01.2015 to 31.12.2019 • К =1.84 for biogas plants, commissioned from 01.01.2020 to 31.12.2024 • К =1.61 for biogas plants, commissioned from 01.01.2025 to 31.12.2029 Suggested: Set GT factor also for biogas plants, commissioned before 01.04.2013
Abolishment of the list and fixed share of items of local component for biomass plants In edition of Law of Ukraine “On Power Industry”, which comes into force on 01.07.2013 (Article 17 ‐ 3) names of some items of local component are incorrect (underlined), and established norms are impossible to fulfill: Items of local Operations that should be Fixed share, % component performed within Ukraine Turbine production 25 Boiler production 35 Construction works implementation 40 Total 100 Suggested: To abolish any requirements concerning the share of local component for electric power facilities, which produce power from biomass.
Abolishment of the list and fixed share of items of local component for biogas plants In edition of Law of Ukraine “On Power Industry”, which comes into force on 01.07.2013 (Article 17 ‐ 3) names of some items of local component are incorrect (underlined), and established norms are impossible to fulfill: Items of local component Operations that should be Fixed share, % performed within Ukraine Bioreactor for hydrolysis production 35 Cogenerator production 35 Construction works implementation 30 Total 100 Suggested: To abolish any requirements concerning the share of local component for electric power facilities, which produce power from biogas.
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