Legal nature of the Power Purchase Agreement at the feed-in-tariff

Keywords: Power Purchase Agreement, feed-in-tariff, guaranteed buyer, RES-produced electricity, electricity, bankable PPA

Abstract

The article analyzes the procedure of buying the electricity according to the feed-in-tariff (FIT) and the model («Typovyi») Power Purchase Agreement, in connection with the introduction of a new electricity market and the order of Renewable producers` business. Specific features of the model Power Purchase Agreement conclusion between Renewable producers and the Guaranteed Buyer are defined. It also analyzed the differences between the model Power Purchase Agreement and the oriental agreement as well as researched a mechanism of investors protection who would invest in the Renewable projects. The authors of the article have made a comparative analysis of the different Power Purchase Agreement`s editions, in particular: actual model agreement form and oriental agreement according to which the Renewable producers are no longer work but the provisions contained therein make it possible to analyze the process and the reasons for adoption of the new one form.

Effectiveness of a new electricity market introduction from July 1, 2019 depends on the regulation of the activities for all the market participants. Special operating conditions have been provided for the Renewable electricity producers. In particular, with the introduction of a new market, Renewable electricity producers began to sell electricity to the Guaranteed Buyer, the successor of the SE «Energorynok». However, in order to implement the new procedure of work for the Renewable producers, the Regulator needed to approve certain regulatory acts. With this purpose, in September 2018, the National Commission for State Regulation in the Fields of Energy and Utilities published a draft resolution «On approval of regulatory acts regulating the activity of a guaranteed buyer and purchase of electricity at feed-in-tariff», which contained the form a new model contract for the sale of electricity at feed-in-tariff between a Guaranteed buyer and an entity that produces electricity using alternative energy sources as well as the order of purchase and sale of electricity at FIT.

As rightly expected, the approval of these regulations is an important element not only for functioning of the new electricity market, but also for the continued growth of electricity production from renewable energy sources and attracting international investments.

References

The cost of wind power is equal to the cost of electricity from coal plants. Tatiana Turlikyan. URL: https://ecotown.com.ua/news/Sobivartist-enerhiyi-vitru-zrivnyalasya-z-sobivartistyu-elektroenerhiyi-vid-vuhilnykh-stantsiy-/ [in Ukrainian].
About the scolding of Energy Strategy of Ukraine for the period up to 2035 “Security, energy efficiency, competitiveness”. CMU Order dated 18.08.2017 No. 605-р URL: https://www.kmu.gov.ua/npas/250250456 [in Ukrainian].
On the electricity market. Law of Ukraine dated 13.04.2017 No. 2019-VIII. URL: https://zakon.rada.gov.ua/laws/show/2019-19 [in Ukrainian].
On Amendments to some Laws of Ukraine on implementation the feed-in-tariff. Law of Ukraine dated 25.09.2008 No. 601-VI. URL: https://zakon.rada.gov.ua/laws/show/601-17 [in Ukrainian].
Hillmont Partners. ALERT: New rules for Ukraine’s green energy: Feed-in Tariff Auctions, the unification of Power Purchase Agreements. URL: https://hillmont.com.ua/publ/alerts/alert-new-rules-ukraines-green-energy-feed-tariff-auctions-unification-powerpurchase-agreements On approval of legal acts regulating the activity of the guaranteed buyer and purchase of electricity at the feed-in-tariff. NUNRCU Resolution dated 26.04.2019 No. 641. URL: https://zakon.rada.gov.ua/laws/show/v0641874-19/sp:wide [in Ukrainian].
On the approval of the Model Contracts concluded with the entities producing electricity using alternative energy sources. NUNRCU Resolution 11.10.2012 No. 1314. URL: https://zakon.rada.gov.ua/rada/show/v1314862-12/sp:max100 [in Ukrainian].
Kitsyk, Y.R. (2016). Use of model and standard contracts in the field of electricity of Ukraine. Private Law and Entrepreneurship. 16, 120–123 [in Ukrainian].
Belianevich, O.A. (2006). Economic contract law of Ukraine (theoretical aspects) monograph. Kyiv: Yurincom Inter [in Ukrainian].
Economic Code of Ukraine. Law of Ukraine dated 16.01.2003 No. 436-IV. URL: https://zakon.rada.gov.ua/laws/main/436-15 [in Ukrainian].
How to Cite
Nykytchenko, N., & Gordienko, K. (1). Legal nature of the Power Purchase Agreement at the feed-in-tariff. Law Review of Kyiv University of Law, (4), 169-174. https://doi.org/10.36695/2219-5521.4.2019.30
Section
The issues of civil law, commercial law, labour law and social security law of U