On 27 February 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 227 “On Introduction of Guarantees of Origin of Electricity Produced from Renewable Energy Sources” (“Resolution”) that came into force on 5 March 2024.
The Resolution sets rules for the operation of the renewable energy guarantees of origin (“GoO”) mechanism.
Background
The foundation of the GoO was laid down last year by Law of Ukraine No. 3220-IX “On Amendments to Certain Laws of Ukraine on Restoration and Green Transformation of the Energy System of Ukraine” (“Law”).
The GoO’s primary function is to show a final customer that a given share or quantity of energy was produced from renewable sources. It also serves as a proof that offered goods and services were produced using “green” energy making a smaller carbon footprint.
The GoO mechanism will allow Ukrainian businesses to (1) comply with the EU regulations regarding the climate goals of decarbonisation, (2) confirm corporate compliance with sustainable development goals, (3) avoid additional costs when exporting goods to the EU countries, and (4) attract green financing.
Resolution’s key points
The Resolution sets two main procedures: (1) the procedure for issuing, circulation, and cancellation of the GoO, and (2) the procedure for determining the environmental value of electricity produced from renewable sources.
In particular, the Resolution provides the following:
- the National Energy and Utilities Regulatory Commission (“NEURC”) will administer a digital register of the GoO (“Register”), which will feature at least two languages – Ukrainian and English;
- the NEURC will take necessary measures to implement the integration of the Register with the registers of the Energy Community, the European Union, and the Organization for Economic Cooperation and Development;
- to ensure compliance with applicable regulations, the capacities stated in the Register are subject to on-site inspections. As of now, only the procedure for inspecting the capacities of customers is in place. The NEURC will further adopt the inspection procedure for commercial producers;
- any use of the GoO must take place within 18 months from the date of production of the respective energy unit. However, any transfer of the GoO is limited up to 12 months from the date of the energy production;
- the GoO can be issued for electricity from energy storages provided that such storages are used at facilities producing electricity from renewable sources;
- the GoO cannot be issued for electricity produced by hydro-accumulating power plants;
- the environmental value of electricity is measured in kilograms of CO2 equivalent per 1 MWh of electricity. It determines the average greenhouse gas emissions from electricity producers that use thermal power plants to generate equivalent volumes of electricity from fossil fuels; and
- the Ministry of Energy calculates the environmental value using five years of publicly available data on annual greenhouse gas emissions from the energy sector and the electricity production volumes from fossil fuels.
By Glib Bondar, Senior Partner, and Maksym Maksymenko, Partner, Avellum
